NEW DELHI: Reliance Industries reported a 19% rise in net profit, beating Street expectations, as the giant Jamnagar plant gained handsomely from bigger margins in refining lowgrade crude oil into high-value fuelwhile the rupee's fallmagnified the earnings of India's biggest exporter. The company earned $8.4 from every barrel of oil it refined during the April-June quarter, up from $7.6 a year ago, helping net profit rise to Rs 5,352 crore during the quarter. Turnover contracted 4.6% because of lower prices and slightly lower volume at the world's largest refining complex, which operated at 110% capacity. 'Other income', mainly from treasury operations, accounted for 38% of the pretax profit. Reliance also gained from higher petrochemicals margins, but the oil and gas business continued to contract in step with falling output at the KG-D6 deep-water block. The company will gain from the government's recent decision to raise natural gas prices from the next fiscal, which will significantly boost earnings after new fields start operations by 2017. "Positive momentum building in the domestic upstream business with the successful discovery in MJ1 (in theKG-D6 block) and approval of the new gas price formula," it said in a presentation. The company is upbeat about the growth of its retailing business, which saw revenues rise 53% to Rs 3,474 crore and was poised for "strong growth". The company said it had crossed a significant milestone in its aspiration to become India's "favourite grocer": Every minute it sells 100 garments, 1,000 litres of milk and 1,000 kg of vegetables and fruit. Reliance exported 10.1 million tonnes of refined products during the quarter, up from 9.3 million tonnes a year ago. Other Income Props Up Profit Exports of refined products contributed $8.6 billion of the company's total exports of $9.6 billion. CMD Mukesh Ambani said he was confident about RIL's future prospects. "Our performance this quarter reflects higher operating rates and embedded options in crude sourcing and product placement, given the size and scale of the refining business. Robust growth in petrochemical products demand augurs well for our biggest-ever expansion programme. Retail business continues to make remarkable progress and registered a 53% growth in revenues during the first quarter," he said in a statement. The company plans to develop new gas fields, which have become viable because of higher natural gas prices. The company's Joint Chief Financial Officer, Alok Agarwal, told reporters that Reliance had the approval to go all out to stabilise production at the depleting fields in the KG-D6 block. RIL's profit was propped up by 'other income', which rose to Rs 2,535 crore ($427 million) from Rs 1,904 crore in the year-ago period.

Source